WTO rules for US in dispute vs China

NEW YORK  The World Trade Organization (WTO) has sided with the United States in a dispute over export restrictions by China on tungsten, molybdenum and 17 rare earths elements, U.S. Trade Representative (USTR) Michael Froman said March 26.

"Chinas decision to promote its own industry and discriminate against U.S. companies has caused U.S. manufacturers to pay as much as three times more than what their Chinese competitors pay for the exact same rare earths," Froman said in a statement. "WTO rules prohibit this kind of discriminatory export restraint and this win today, along with our win two years ago in an earlier case, demonstrates that clearly."

The American Iron and Steel Institute hailed the WTOs decision, which it said is evidence that China has not been upholding its obligations as a WTO member.

"We are pleased to see the U.S. government working with our allies to address Chinas unfair trade practices and hope that the vigorous enforcement of the global trade rules continues," AISI President and chief executive officer Thomas J. Gibson said in a press release.

The United States initiated the WTO dispute in 2012 in coordination with the European Union and Japan after China reduced its export quotas for the metals, causing spikes in world prices and disruption to the rare earths supply chain (amm.com, March 13, 2012). The United States had argued that Chinas actions were in violation of its obligations to the international organization. A year prior, the United States won a victory in challenging Chinas use of export restraints on a number of raw material inputs used in the steel and aluminum markets, including bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow phosphorous and zinc (amm.com, July 5, 2011).

Under WTO rules, the panel report may be adopted or appealed within 60 days.